TaxTMI 
TaxTMI 
2024 (5) TMI 583
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....24 to 28.02.2024. The secretary could not attend to any other affairs during this period and hence the appeal could not be filed within the due date. As soon as the condition improved, the Secretary took necessary steps and filed the appeal on 05.03.2024. The assessee submitted medical certificate as proof and submitted that the delay in filing the appeal was neither intentional nor deliberate and therefore pleaded to condone the delay and admit the appeal for hearing. In the instant case, the order of the Ld.CIT(A) was passed on 21.12.2023, as such, the appeal against the order ought to have been filed on or before 19.02.2024. However, the assessee filed appeal with the delay of 15 days, citing medical reasons. I have gone through the condonation petition and medical certificate filed by the assessee and find that there is a reasonable cause for filing the appeal belatedly. Hence, I condone the delay and admit the appeal for hearing in the interest of justice. Since the grounds raised in these appeals are identical, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under. Facts are extracted from I.T.A.No. 85/Viz/2024....
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....s by providing credit facility to it's members, marketing of agricultural produce grown by it's members, supply of agriculture inputs to members etc. The assessee society made deposits with District Cooperative Central Bank (DCCB) in compliance with the statutory regulation of AP Cooperative Societies Act, the interest on such investment is eligible for deduction u/s 80P(2) of the Act. The Ld.AR submitted that the assessee is not having any intention to gain any benefit from other sources. The Ld.AR further submitted that the facts relied on by the revenue authorities in the case of M/s Totgars Cooperative Sale Society Ltd. reported in 322 ITR 283 are distinguishable to the facts of the assessee's case. The Ld.AR further submitted that as per para 11 of the judgement in the case of M/s Totgars Cooperative Sale Society Ltd. (supra), it is clearly mentioned that "this judgement is confined to the facts of the present case" and therefore it cannot be applied in the assessee's case. Thus, the assessee is eligible for deduction u/s 80P of the Act. The Ld.AR relied on the decision of the coordinate bench of the Tribunal in the case of The Andaluru Large Size Co-operative Society vide I.T....
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....ase of M/s Totgars Cooperative Sale Society Ltd.(supra) shall not be applied to the instant case. On similar set of facts, coordinate Bench of this Tribunal in the case of The Andaluru Large Size Co-operative Society vide I.T.A.No.58/Viz/2024 dated 27.03.2024 held in favour of the assessee, relying of the decision of the coordinate bench in the case of Kakateeya Mutually Aided Thrift and Credit Co-op Society, vide I.T.A.No. 107/Viz/2022, CO No. 07/Viz/2022 dated 30.08.2023. For the sake of reference, relevant paragraphs of the order are extracted as under: "8. We have heard both the sides and perused the material available on record and the orders of the Ld. Revenue Authorities. It is an admitted fact that the assessee has claimed deduction u/s. 80P(2)(a)(i) of the Act on the interest accrued and received by the assessee u/s. 80P(2)(a)(i) of the Act. The contention of the Ld. AO is that as per section 80P(2)(d), the assessee is eligible to claim deduction u/s. 80P(2)(a)(i) of the Act only when it is invested with any other cooperative society. The Ld. AO also placed heavy reliance in the case of M/s. Totgars Cooperative Sale Society Ltd (supra) while disallowing the claim ....
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....and gains of business attributable to any one or more of such activities: 9. Further, we also extract below the provisions of section 80P(2)(d) and (e) of the Act for reference: "(d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other cooperative society, the whole of such income; (e) in respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income;" 10. From the plain reading of section 80P(2)(a)(i) of the Act, the whole of amount of profits and gains of the business attributable to one or more of such activities shall be allowed as a deduction. Further, section 80P(2)(d) and 80P(2)(e) of the Act also allows similar deductions. It is clear that the deductions available under clauses (a) to (e) of section 80P(2) are activity based whereas clauses (d) and (e) are investment based. The distinction between clauses (a) and clauses (d) & (e) on the other hand is that the benefit under clause (a) is restricted to only into those activities of a c....
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....ee in Totgars was carrying on some of the activities listed in clause (a) along with other activities. This is perhaps the reason that the assessee did not pay to its members the proceeds of the sale of their produce, but invested the same in banks. As a consequence, the investments were shown as liabilities, as they represented the money belonging to the members. The income derived from the investments made by retaining the monies belonging to the members cannot certainly be termed as profits and gains of business. This is why Totgar's struck a different note." 11. Further, the Hon'ble jurisdictional High Court of Andhra Pradesh and Telangana in the case of Vavveru Co-operative Rural Bank Ltd vs. Chief Commissioner of Income Tax and Another (supra) held that the cooperative society is eligible for deduction u/s. 80P(2)(a)(i) of the Act on the interest income received from investment in banks. The Hon'ble High Court in paras 35 to 37 of its judgment held as under: 35. But, as rightly contended by the learned senior counsel for the petitioners, the investment made by the petitioners in fixed deposits in nationalized banks, were of their own monies. If the petit....